Money is a ubiquitous part of our daily lives, and yet we are often taught that it is impolite to talk about it. Learn all about the psychology of money in this episode
Money is a ubiquitous part of our daily lives, and yet we are often taught that it is impolite to talk about it. However, money is much more than a physical entity that we use to buy our essentials and luxuries. Our relationship with money is emotional and intricately tied to our inner psychology. Emotion decides:
- Why we need money
- How we make our money
- How we share our money
- How much of our money is allotted to spending
- How much goes into our savings
Family dynamics may influence how money is viewed
Our family dynamics may shape our relationship to money. Some children are raised by parents or guardians who have a healthy and stable relationship with money. These children may not struggle with money in their adult lives. They may feel safe and financially cared for as they grow up. This can carry on into their adult life as they start a career and earn their own income.
Some children are raised by parents or guardians who are extremely wealthy. Affluent families may feel bonded by their money. This can create a tricky relationship for a child. They may struggle to find their own independence and wealth seeing as they grew up thinking that they would always be taken care of.
There are also many children who grow up in families who deeply struggle with money. This can affect their relationship to money in quite a few ways, including being fearful of spending their hard earned money. Ultimately, childhood and family experiences can play a big role in how an adult works and chooses to spend their earnings.
There are personality types associated with money
Many experts push the importance of finding a healthy relationship with money. This means gaining an understanding of how money works as well as educating yourself so that you can make proper financial decisions. However, psychology experts also believe that there are seven personality types associated with money and learning which one you are is also crucial. Their money personality type is their approach and emotional response to money. Which as we mentioned above, is greatly shaped by our family or current personal life.
These seven specific personality types are:
- The Compulsive Saver
- The Compulsive Spender
- The Compulsive Money Maker
- The Indifferent-To-Money
- The Saver -Splurger
- The Gambler
- The Worrier
Mental health conditions can lead to financial struggles
Many people around the world struggle with mental health conditions. In America, more than 50% of the population will be diagnosed with a mental illness or mental disorder at some point in their life. The most common conditions are:
- major depression
- bipolar disorder
All of these mental conditions can lead to financial struggles and insecurities. These struggles may include:
- excessive spending on substances
- being unemployed
- having trouble doing a job properly
- feeling misunderstood, and more
When someone does not seek help for their mental health conditions, they can easily have an unhealthy relationship with money.
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The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.